Trading Scams

Online retail trading is a product that continues expanding its audience. Multiple research papers indicate that over 78% of the planet’s population has access to the internet. The very access to the World Wide Web is considered a human right according to the UN. All users of the internet can engage in online trading meaning that the global audience is massive.

While this particular financial product is not a scam and provides many people with a chance at financial independence and reliable money-making tools, the industry around it is full of scammers that want to take advantage of inexperienced newcomers.

Typical ways trading scams operate

There are various types of trading scams that can be employed by scammers. Some are more insidious than others. We will discuss several most commonly encountered types of trading scams that you should avoid like fire!

  • Automated trading. Many respectable brokerage service providers and exchanges offer various automation tools, but they still put pressure on making choices and setting them up on end users. Scammers offer ready-to-use robots that promise to make millions of US dollars in a couple of years. Meanwhile, you will have to pay monthly or annual subscription fees and make other payments.
  • Fake exchanges. This one is quite popular among scammers especially considering how easy it is to create a fake website with all the required whistles and bells to attract inexperienced retail traders. A fake exchange will either work as a closed system and never executes orders or will simply take your money and dissolve immediately.
  • Trading advisors. Some people may pose as experienced technical analysis specialists and show you accounts with millions of dollars on them. For a relatively small fee, you will be able to join their discord servers or follow them on various platforms to receive advice regularly. These scammers are often anonymous and create fake personas to hide behind.
  • Selling signals. Many influencers on social media who pose as financiers and experts will sell signals via Telegram and WhatsApp bots or other ways. These signals will work at a roughly 50% success rate because they are made up of or follow very simple technical analysis patterns.

The issue with trading scams

One of the biggest problems is that many of these scams are actual products. The only unlawful thing that many influencers are doing is false advertising. Many make it clear that signals that are generated are not of their making and explicitly say in their financial advice that it is not “financial advice”.

Automation is an actual product that you may or may not use. You are paying for the automation service with some presets already in place and created by someone else. Again, proving that these actions are a scam is often a tall task.

It is a little bit easier in cases with fake exchanges where scammers have to create some legal entity to receive funds from users via credit and debit cards or other banking methods.

How to recover the money?

If you paid with your debit or credit card to a business entity (a fake exchange), you can call your bank and request a cancellation of recent purchases. Usually, an issuer of a card gives users up to 30 days to make a cancellation request. However, transfers from user to user are a different thing and you won’t be able to get your money back.

In other scenarios, we highly recommend you work with a specialized company that offers fund recovery services. Initially, you will be able to receive a consultation and decide whether you encountered a scam or something in the gray area.

A money recovery company will attempt to help you recover lost funds if the actions of an individual qualify as a scam. These companies are usually the only effective recourse for victims of various trading scams on the internet.